Theresa May: I would dearly love to be able to welcome a forecast in the Budget, and I dearly hope that the savings ratio will increase. However, at the rate that the Chancellor is going, I do not think that any of the forecasts that he has included in the Budget are to welcomed, because I do not think that we can believe any of them.
	I want to refer briefly to the tax rise on pensions. I am afraid that the Budget was more about politics than about presenting a plan for economic recovery. There is a sense of déjà vu. One of Gordon Brown's first acts as Chancellor was to raid £100 billion from pension funds, and now as Prime Minister, his latest tax hike in relation to the higher-rate relief on pension contributions will take a further £3 billion a year out of pensions. Those changes are not being implemented from 2011, as the Government would have people believe—some new rules on higher-rate tax relief for earnings above £150,000 came into effect the day after the Budget. Not only do they taper higher-rate tax relief for those earning over £150,000 but they tax employer contributions. Savings, of course, will be taxed when people begin to draw their pensions. Those proposals break the basic covenant between savers and the Government, enshrined in the Turner report on pensions, that responsible savers will be rewarded for locking up income in pensions savings for their retirement. Instead of being rewarded, however, they will be taxed several times over. The changes will add more complications to an over-complicated system, too. Any claims that the Government want to simplify pension savings and their administration have been completely undermined by what the Chancellor did in the Budget.
	The Chancellor said that the measure was about fairness, but the money raised in taxes from the pensions of high earners will not go towards improving pensions for those on low incomes. It will simply help to plug the black hole in finances created by Labour. In the words of Dr. Ros Altmann, who said in her response to the Budget:
	"Instead of encouraging people to save while the economy was doing well, Government policy encouraged spending and borrowing as if there was no tomorrow. But there is a tomorrow. And for those approaching retirement, it is looking distinctly bleak."
	Let us be clear: we do not believe that increasing taxes on pensions is the right thing to do. We do not support it, but we are not going to be dragged into playing Labour's games. There are a number of new tax rises with which we do not agree, but this one will have to take its place in the queue. Our priority is that of all of Gordon Brown's tax rises, the most important ones—

Stephen Hammond: It is more likely to be Ali Bongo. He was a failed magician and these are likely to be failed forecasts.
	Page 181 of the Red Book says that UK GDP will contract by 3.25 per cent. in 2009. It then states:
	"As macroeconomic stimulus builds and credit conditions ease"
	there will be
	"annual growth of 1¼ per cent. in 2010"
	and
	"3½ per cent. in 2011".
	We have to ask ourselves whether that is actually credible.
	Let us forget the fact that the IMF disagrees with the 2010 number, and the fact that the Chancellor has just put up the 2011 growth number by a whole percentage point against the figure in his pre-Budget report. The real test of credibility is found in testing against the evidence of history. History teaches us first that recessions are not common, and secondly that quick recoveries from recessions are not common either. Typically, once a trough is reached—this is the point about a U-shaped or V-shaped recession—it takes two years to return to trend growth rates.
	Let us consider the two recessions that are referred to in the Red Book. During the recession of 1979 to 1982, the first quarter of negative growth happened in the first quarter of 1979. However, the recession was not evident until the fourth quarter. We had consistent negative growth through to the first quarter of 1981 and we did not return to trend growth until the first quarter of 1983. The recession of the 1990s followed a shallower but similar pattern. The first quarter of negative growth was in Q3 of 1990 but it was not until Q3 of 1993 that we returned to trend growth.
	It seems to me that what the Chancellor has postulated, which is that we will see a growth of 3.25 per cent. in 2011, borders on the incredible. The first negative quarter of growth in this recession was in the third quarter of 2008. We have had three quarters of negative growth since then. It is quite clear from the Chancellor's prediction for the fall in GDP this year that we will continue to see negative growth quarters up until the fourth quarter of this year—let us be optimistic and say that that will be the last quarter of negative growth. The point is that we will not see any return to trend growth until at least two years after that, which takes us well beyond the Chancellor's expectations for 2011.

Resolved,
	That—
	(1) Section 393A of the Income and Corporation Taxes Act 1988 (losses: set off against profits of same or earlier accounting period) has effect in relation to any loss to which this Resolution applies as if, in subsection (2) of that section, "3 years" were substituted for "twelve months" (but subject as follows).
	(2) This Resolution applies to any loss incurred by a company in a trade in a relevant accounting period (but subject to paragraph (3)); and a relevant accounting period is one ending after 23 November 2008 and before 24 November 2010.
	(3) The maximum amount of loss to which this Resolution applies in the case of any company is—
	(a) £50,000 in relation to losses incurred in relevant accounting periods ending after 23 November 2008 and before 24 November 2009, and
	(b) £50,000 in relation to losses incurred in relevant accounting periods ending after 23 November 2009 and before 24 November 2010;
	and the overall limit or limits apply whether a loss is incurred by the company in only one relevant accounting period or losses are so incurred in more than one such period.
	(4) Subject to that, if in the case of the company the length of a relevant accounting period is less than one year, the maximum amount of the loss incurred in that period that may be set off under section 393A of the Income and Corporation Taxes Act 1988 by virtue of this Resolution is the relevant proportion of £50,000.
	(5) "The relevant proportion" is—
	where—
	RAP is the number of days in the relevant accounting period, and Y is 365.
	(6) The reference in subsection (2C) of section 393A of the Income and Corporation Taxes Act 1988 to so much of the loss referred to in that subsection not falling within subsection (2B) of that section as does not exceed the amount of the allowance mentioned in subsection (2C)(b) ("the subsection (2C) loss") has effect in relation to a relevant accounting period as a reference to so much of the subsection (2C) loss as exceeds that which can be set off under section 393A of the Income and Corporation Taxes Act 1988 by virtue of this Resolution.
	And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.